Royalty suits filed vs. labels

The ongoing legal battle between artists and labels over digital royalties widened late last week, as two new suits alleging gross underpayments to acts were filed. On Friday, singer-guitarist Peter Frampton sued A&M Records, a unit of Universal Music Group, claiming he was paid a fraction of what he was due for downloads of his '70s hits. Frampton's suit succeeded a similar Thursday action filed against Capitol Records by the heir of the late Bruce Gary, drummer of '70s new wave act the Knack. The latter suit against EMI Music's flagship imprint is the first of several actions regarding digital royalty payments to be lodged against a label not operated by UMG. However, UMG could ultimately prove liable in that case, since last month the company made a successful $1.9 billion bid for EMI's label assets that has yet to be approved by regulators. Both plaintiffs scored huge hits for their labels in the '70s. Frampton's two-LP A&M concert set "Frampton Comes Alive" was No. 1 for 10 weeks in 1976, while the Knack's Capitol album "Get the Knack," which contained the No. 1 single "My Sharona," topped the charts for five weeks in 1979. Both suits allege breach of contract and unfair competition and seek compensatory damages to be determined at trial. Frampton's suit, which succeeds a 1998 royalty settlement between the musician and UMG, says the language of the agreement is "virtually identical" to that of last year's appellate court decision in F.B.T. Prods.' suit against UMG and Aftermath Records. That decision found that F.B.T., which produced Eminem's earliest recordings, was entitled to much higher digital royalties based on rates for masters licensed to third parties (Daily Variety, Sept. 7, 2010). It inspired class actions filed in federal court in Northern California earlier this year by the Rick James estate (Daily Variety, April 5); Rob Zombie, his band White Zombie, Whitesnake and Dave Mason (Daily Variety, May 24); and Chuck D of Public Enemy (Daily Variety, Nov. 3). On Dec. 22, Bruce Gary's sister Felice Catena, who holds rights to Gary's interest in the Knack, filed a suit in L.A. Superior Court alleging that Capitol has "systematically" paid less than the 50% of net receipts contractually due for licensed masters. Frampton's suit, lodged Dec. 23 in U.S. District Court in L.A., makes a similar allegation. Frampton claims that a $212,000 check sent to the musician without documentation late this year was "wholly insufficient to cover the actual monies owed to Frampton, which is potentially hundreds of thousands of dollars more than the insufficient partial payment made by UMG." Spokesmen for UMG and EMI could not be reached for comment. However, UMG has consistently maintained that the appellate decision in the so-called Eminem case does not constitute a legal precedent. Contact the Variety newsroom at news@variety.com